Solar modules stuck at Indian ports due to import duty dispute

Indosolar

05/01/2018 13:25

By Neha Dasgupta and Sudarshan Varadhan 
    NEW DELHI, Jan 5 (Reuters) - Solar modules worth more than 
$150 million are stuck at various Indian ports due to a dispute 
over their classification and the import tax applicable to them, 
sources said, which could delay  Prime Minister Narendra Modi's 
clean energy goals. 
    Modi has set an ambitious target of nearly tripling the 
country's total renewable energy capacity to 175 gigawatt (GW) 
by 2022, spurring global firms including Japan's SoftBank 
 9984.T  and Goldman Sachs  GS.N  to invest in solar projects in 
the country. 
    Most of the solar modules come from China, but several 
consignments are now held up because customs officials have 
demanded that some of them be classified as "electric motors and 
generators", attracting a 7.5 percent duty, not as "diodes, 
transistors and similar semi-conductor devices" with no duty. 
    Two customs officials in the southern port of Chennai 
confirmed the issue regarding the classification. 
    C. Narasimhan, president of the Indian Solar Association, 
said that up to 2,000 solar module containers are now stranded 
at four major ports. 
    "Port disruptions like this will hamper the country's 
progress towards achieving the target of 100 GW in installed 
solar capacity by 2022," said Narasimhan, a former lawmaker. 
    The Indian unit of Germany's Enerparc had 30 of its 
containers stuck at Chennai for three weeks as it finished some 
"paperwork" and paid a demurrage - a charge for failing to 
discharge the ship on time - of about 7 million rupees  
($110,471), its Managing Director Santosh Khatelsal said. 
    The renewable energy ministry has already asked the finance 
ministry to resolve the matter without disrupting business, said 
a government official with direct knowledge of the matter. 
    Any duty is bad news for project developers such as 
SoftBank-backed SB Energy but good for local solar component 
makers such as Indosolar  INDL.NS  and Moser Baer  MOSR.NS . 
    Indian manufacturers have struggled to compete with Chinese 
companies such as Trina Solar  TSLy.D  and Yingli  YGE.N  and 
have sought anti-dumping duties as well as long-term safeguards. 
 urn:newsml:reuters.com:*:nL3N1IV2YG 
    "The interests of domestic manufacturers and developers 
should be protected with least harm," said the government 
official, who declined to be named. 
    "The dispute has the potential to disrupt deployment by 
increasing the cost of projects but at the same time might 
protect the domestic manufacturers." 
    The finance ministry is examining a proposal from the 
renewable ministry to exempt projects bid earlier from paying 
the duty, the official said. 
    Spokesmen for the Ministry of Finance and Ministry of New 
and Renewable Energy declined to comment. 
    Raj Kumar Singh, the minister for power and renewable 
energy, recently told parliament that the government was working 
on remedying the problem. 
    ($1 = 63.3650 Indian rupees) 
 
 (Reporting by Neha Dasgupta and Sudarshan Varadhan; Writing by 
Krishna N. Das; Editing by Elaine Hardcastle) 
 ((Krishna.Das@tr.com; +91-98711-18314,  +91 11 4954 8026; 
Reuters Messaging: Krishna.Das.thomsonreuters.com@reuters.net, 
Twitter: https://twitter.com/krishnadas56)) 
 
Keywords: INDIA SOLAR/